Strategic Thinking & Strategic Action

Fostering strategic thinking and strategic action by organizational leaders since 2007.

Case 2: The battle that didn’t go as expected
Decision biases cases Lee Crumbaugh Decision biases cases Lee Crumbaugh

Case 2: The battle that didn’t go as expected

Confederate General Robert E. Lee believed that his troops could overrun the Federal's front line at the battle of Gettysburg.  He was wrong: Pickett's charge by 15,000 Confederate soldiers against 6,500 entrenched Federals resulted in over 6,000 Confederate casualties and ended Lee’s last invasion of the north.   Here are several traps and errors that may have led Lee to believe the charge would succeed.

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The risk of ignoring risk
Risk Lee Crumbaugh Risk Lee Crumbaugh

The risk of ignoring risk

What is startling is that the engineer who invented the digital camera worked for the giant of photography, Kodak. Kodak owned the patent for what the engineer invented. Yet, Kodak proceeded to bury the technology rather than commercialize it. Had it instead adopted the technology on a timely basis, today it could be the Apple of digital imaging. The New York TImes' Lens blog offers a great summary of the invention of the digital camera and Kodak's failure to embrace it. The attitude at Kodak was that no one needed digital photos. Film and photos printed on paper, using silver halide technology, had ruled for 100 years and Kodak ruled film and paper.photography. How wrong was that conclusion! Evidence was ignored as digital photography caught hold. Biases reined at Kodak.

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Misuse of evidence can zap your strategy
Evidence Lee Crumbaugh Evidence Lee Crumbaugh

Misuse of evidence can zap your strategy

Bad strategic decisions can result from insufficient or misused evidence. We are programmed to immediately "fit" the information we have at hand to our experience – magnified by what is most current and what seems "like" or relevant to the situation - whether it is applicable or sufficient. Here's an example of a seemingly very smart organization that stumbled because of insufficient and misused evidence.

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Failure without facilitation: The French Canal Disaster
Decision biases cases Lee Crumbaugh Decision biases cases Lee Crumbaugh

Failure without facilitation: The French Canal Disaster

In 1879, the Congrès International d'Etudes du Canal Interocéanique (International Congress for Study of an Interoceanic Canal) was convened in Paris under the auspices of the Société de Géographie de Paris to consider proposals to build a canal across Central America, from the Caribbean Sea to the Pacific Ocean. Ferdinand de Lesseps, the French ex-diplomat who had spawned and led the company that created the Suez Canal, chaired the conference and dominated the discussions and the decision making. Despite an immense amount of evidence against the success of a sea-level canal across the Isthmus of Panama, de Lesseps' vision prevailed. More than 22,000 lives were lost and thousands of investors were out the equivalent of nearly $6 billion in current dollars when that Panama canal venture finally collapsed in 1889. Why was it that the errant views of one Frenchman won out over the combined wisdom of the engineering community, the financial community and many others who had spent time scouting the terrain and who had identified the huge problems of disease, torrential rain, dense rain forest, raging rivers and mountains that stood in the way of success? Why in this striking case did not the underlying wisdom of the group prevail?

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No consensus for consensus
Consensus Lee Crumbaugh Consensus Lee Crumbaugh

No consensus for consensus

The adage that "two heads are better than one" is on the right track. In fact, research shows that consensus decisions reached by five or more people are most often qualitatively superior to individual, majority and leader decisions. Consensus decision making works - when properly used. However, having consensus decision making in the organization's arsenal does not necessary mean that it is regularly used to make the big decisions affecting the organization's future. In fact, organizations typically make strategic decisions without the leader obtaining consensus: In two-thirds of organizations the leader typically decides.

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#2 error: Not using the group advantage
Group decisions Lee Crumbaugh Group decisions Lee Crumbaugh

#2 error: Not using the group advantage

Leaders and organizations make a mistake when they don't use the group to make strategic decisions. Research shows groups usually make better decisions. Not using group decision making is one of the 18 categories of biases and poor practices that we have identified that can produce bad strategic decisions.

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Risk and regret
Risk Lee Crumbaugh Risk Lee Crumbaugh

Risk and regret

Regret is a powerful emotion. We don't want to feel regret and seek to avoid it. We not only can feel regret after making a choice, regret that we did not choose what might have been a better option, but we are capable of forecasting our future regret and of taking action now to avoid future regret for not acting. Of course, pursuing an option because we anticipate regret if we don't act does not assure that the choice we make is a "good" risk. Properly assessing the risk and potential return of an option and and whether we act on the option are separable activities. So if regret can get us off dead center and lead us to act, it does not remedy how our mental biases, shortcuts and errors hinder clear-eyed risk assessment.  

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Managing choice
Choice Lee Crumbaugh Choice Lee Crumbaugh

Managing choice

Research shows that having a limited set of choices - rather than none or only a poor option - is empowering and positive. A limited set of options enables us to focus on each option and paves the way for a better decision.  But when the options are multitudinous and are not culled and sharpened, we tend to make a poor choice, latching on to something that attracts us, or falling back on something familiar and comfortable.

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Approach or avoid?
Approach-avoidance Lee Crumbaugh Approach-avoidance Lee Crumbaugh

Approach or avoid?

Approach-avoidance is a psychological syndrome that affects us all, and through us, our organizations.  We discount what might be possible and otherwise exceptional because it daunts us and challenges us to act with intent and resolve, going new directions where the way is not easy nor familiar. We are afraid we will fail. We ignore the truth that we only learn when we bump up against change and challenge what we perceive as boundaries and limits.

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Thinking “as if”
Pre-mortem Lee Crumbaugh Pre-mortem Lee Crumbaugh

Thinking “as if”

One way to help assure that your seemingly great strategy is robust and will produce desired results as opposed to sinking your organization is to conduct a session in which you assess its failure. That’s right, consider conducting what Gary Klein calls a “premortem” (as opposed to a postmortem).

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Smart phones on the savannah
Evolution Lee Crumbaugh Evolution Lee Crumbaugh

Smart phones on the savannah

So why is it that we humans can go astray in recognizing that we have meaningful choices in our lives and in our organizations, in developing and executing winning strategies, in making the big decisions well when it really counts? Let’s consider the idea that as individuals we are maladapted for modern society.  One line of thinking and research proposes that we are optimized for hunting antelope, not for meetings, morning commutes, juggling emails, tweets and posts, and strategy execution.

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Leaders who mislead: A tale of two movies
Leadership Lee Crumbaugh Leadership Lee Crumbaugh

Leaders who mislead: A tale of two movies

Consider how every-day leaders with bad or misplaced intentions lead us and the business and civic organizations we care about astray. A first step to improving how we make the big decisions necessary to get better outcomes in our organizations and our lives is to recognize how we are being played, kept in the dark and misrepresented. Here's a list of some ways leaders use mental flaws, traps and fallacies to mislead us. (If you are the leader and see elements of your own behavior in this list, please change now!)

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Decision traps, flaws and fallacies: Learn from my unexpected big decision
Decision biases cases Lee Crumbaugh Decision biases cases Lee Crumbaugh

Decision traps, flaws and fallacies: Learn from my unexpected big decision

My life was changed by unexpected input into my decision making from a noted journalist and World War II veteran whose plane was shot down and who then spent two years in a German prisoner-of-war camp. I pursued my MBA and a career path which has led to meaningful business roles, strategy consulting and, I hope, useful thought leadership. Making good decisions is at the heart of effective strategic planning and strategic management. That's why I have been taking a deep dive into how we can make big decisions better. Let's examine my life changing exchange with Emmett Dedmon to see what might have been at work that affected my decision making process.

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Open up your thinking: Make better decisions in a group process
Group decisions Lee Crumbaugh Group decisions Lee Crumbaugh

Open up your thinking: Make better decisions in a group process

Group strategy development is better. Having others challenge your thinking typically leads to better results. Also, research shows that averaging multiple judgments produces better outcomes than going with one person's judgment. A big reason to approach strategic planning as group learning is that can expose, mitigate or help avoid many decision making traps.

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Sunk cost fallacy: Throwing good money after bad
Sunk cost fallacy Lee Crumbaugh Sunk cost fallacy Lee Crumbaugh

Sunk cost fallacy: Throwing good money after bad

In economics, a sunk cost is any cost that has already been paid and cannot be recovered. The sunk cost fallacy is a mistake in reasoning in which the sunk costs of an activity - instead of the future costs and benefits - are considered when deciding whether to continue the activity.  The sunk cost fallacy makes it more likely that a person or an organization continues with an activity in which they have already invested money, time, or effort, even if they would not start the activity had they not already invested in it. The greater the size of the sunk investment, the more people tend to invest further, even when the return on added investment appears not to be worthwhile. This trap is sometimes described as "throwing good money after bad," because the resources and effort are already lost, no matter what you do now.

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10 surprising mental traps: Why we make bad decisions
Decision making Lee Crumbaugh Decision making Lee Crumbaugh

10 surprising mental traps: Why we make bad decisions

In research for my upcoming book, Big Decisions: Why we make them badly, how we can make them better, I have discovered more than 280 psychological, perception, memory, logic, physical and social effects, errors, biases, shortcuts, fallacies and traps that lead us into making bad decisions.  Here are ten of what I find to be among the most surprising and thorny traps.  They go by varied names and have many disguises.  I have grouped these traps in three categories, and for each offer a definition and thoughts about why it poses a problem for decision making, and then give some examples of how they can lead us astray.  Read on to find the answers to the "true or false" quiz and to learn much more about ways we unknowingly trip ourselves up.

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Find out where strategy is going
Lee Crumbaugh Lee Crumbaugh

Find out where strategy is going

The Association for Strategic Planning's World Strategy Week, a big event I helped create as ASP's president, is underway this week.  It features a series of webinars with panels of leading strategy thinkers and practitioners from around the world, accompanied by a variety of other events worldwide presented by ASP's chapers and partners.

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What’s driving your organization?
Strategic planning Lee Crumbaugh Strategic planning Lee Crumbaugh

What’s driving your organization?

Ever notice how some organizations generally seem to be on a positive trajectory, while others are constantly playing catch-up, encountering roadblocks and struggling to get on a better track? Among the former are Proctor & Gamble, General Electric, Southwest Airlines and Oracle. Among the latter are Sears Holdings, BlackBerry and Sony. Looking deeper, you may also notice that some of the organizations that appear to have their act together at times have had to do a major reset to get back on an upward path. Examples that come to mind are IBM moving to services, Starbucks going back to basics and Apple pushing beyond its Mac niche market and launching the iPod. As the leaders of struggling companies will attest, it's a very difficult task to right a sinking ship. Where to focus and what to do are paramount issues. Obviously, business as usual is not working and incrementalism is not the answer. We have come up with a set of questions that we think every organizational leader should ask.

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